March hearing set to air whether Microsoft settlement is in public interest

Published: Friday, February 08, 2002

D. IAN HOPPERAP Technology Writer

WASHINGTON (AP)  The federal judge in the Microsoft antitrust case tentatively set a hearing for the second week of March to determine whether the settlement reached by the firm and the federal government is in the public interest.

Her final ruling, however, may wait until after she hears from nine states that chose not to settle in order to fight for stricter penalties for breaking antitrust law.

U.S. District Judge Colleen Kollar-Kotelly may have just a one-day hearing, as requested by the parties, but said she could want them to present evidence as well, which would extend the process.

"I want to leave that door open," Kollar-Kotelly said Friday.

Kollar-Kotelly did not indicate whether she would allow third parties to testify in the settlement hearing. The request to shut them out, made by Microsoft and the government, was assailed by Microsoft critics, who say they want to make sure their view is heard by the court.

The judge tried to address the complications brought by a settlement hearing and a simultaneous effort to bring stronger penalties against Microsoft by nine states that refused the settlement.

In response to the judge, the government and settling states said they would stay out of the remedies hearing by the nonsettling states. Microsoft showed its resolve against those states and said the suing states shouldn't be allowed to criticize the settlement during their own proceeding.

"It is our position that the nonsettling states are entitled to no relief," Microsoft lawyer John Warden said. "We don't think its appropriate for an end run to be done around that and collateral attacks be made."

The judge gave a preliminary approval to the Justice Department's request to put the approximately 30,000 public comments online and on CD-ROM rather than publishing them all in the Federal Register. The department said putting them on paper would cost $4 million.

For those who don't have Internet access at home or work, Kollar-Kotelly suggested the government give some CD-ROMs to individual states for use in libraries.

Courts have found that Microsoft violated antitrust laws and maintained an illegal monopoly in the computer software market. A judge originally ordered the company broken in two as punishment, but that order was reversed on appeal.

Since then, the Justice Department and half the 18 states that sued have settled, pending Kollar-Kotelly's approval.

The settlement would prevent Microsoft from participating in exclusive deals that could hurt competitors and require that the company release some of its blueprints for its flagship Windows operating system to software developers.

The judge said the government and Microsoft also should use the comment publication to respond to criticisms filed with the court.

The American Antitrust Institute, a group of legal scholars, has argued that Microsoft should have disclosed its congressional lobbying contacts rather than just the contacts it made with the executive branch. Microsoft maintains that the disclosure requirement of the Tunney Act, which governs the settlement process, doesn't apply to lobbying Congress.

Second, lawyers for California plaintiffs suing Microsoft in a class-action effort say the settlement would erase the judicial record of liability against Microsoft. That would severely hamper the California consumers, who are suing Microsoft for allegedly overcharging for its software products.

Both groups are trying to intercede in the antitrust case and stop the settlement process.

Also Friday, Microsoft asked the court to force Oracle, one of the company's fiercest rivals, to comply with subpoenas in the case. An Oracle executive was called to testify for the nonsettling states, but has now been removed from the witness list.

Microsoft wants copies of Oracle documents related to the case, as well as an interview with Oracle Vice President Ken Glueck, whom Microsoft calls "one of the prime movers behind the nonsettling states remedial proposals."